Do you want $3 of your federal tax to go to the Presidential Election
Campaign Fund?

Yes

No

As a U.S. taxpayer, you are asked to make this choice when you fill out
your 1040 federal income tax return. Before you exercise that choice, you
may have some questions:

What is the checkoff for?

Who receives the money?

How is the money spent?

Does the checkoff increase my tax?

This brochure provides some answers.

What Happens to My Three Dollars?

When you check "yes," three of your tax dollars are placed in
the Presidential Election Campaign Fund. During each of the last
five years, approximately 33 million taxpayers have checked the "yes"
box. Every four years, the federal government distributes dollars from the
Fund (sometimes called public funds or federal funds) to qualified Presidential
candidates and national party committees for use in the Presidential elections.
Whatever money is left over at the end of the Presidential election remains
in the fund and is used in the next election, four years later.

Who Receives the Checkoff Dollars?

Presidential
Nominees in the General Election. The Republican and Democratic nominees
in the general election receive a fixed amount of checkoff dollars. Nominees
from other political parties may qualify for a smaller, proportionate amount
of checkoff funds if they receive over five percent of the vote.

Presidential Primary Candidates. Candidates in the Presidential
primaries may receive checkoff dollars, in the form of matching funds. Contributions
of up to $250 from individuals are matched dollar for dollar. PAC and party
contributions are not matchable.

Party Nominating Conventions. The national parties receive checkoff
funds to cover the costs of their national conventions held every four years
to select their Presidential nominees.

Why Did Congress Adopt the Public Funding
Law?

Congress set up the checkoff in the early 1970's as an alternative way
of funding Presidential elec tions. Candidates that choose to accept public
funds can reduce their dependence on large contributions from individuals
and groups. In the general election, the public funding system places the
two major-party nominees on an equal financial footing in the campaign.

May Any Candidate Receive the Public Funds?

No. The Federal Election Commission (FEC) certifies the eligibility only
of those candidates who meet the strict qualifications established by Congress.

General election nominees must agree not to accept any private contributions
(from individuals or PACs, for example).

Candidates must promise not to spend more than $50,000 of their own
money on their campaign.

Recipients of public funds must adhere to a limit on total spending.

Must Candidates Accept Public Funds?

No. A candidate may choose not to participate in the public funding program.
In that case, the candi date is not bound by the expenditure limits.

In the General Election, Do Candidates Benefit
from Any Other Financial Resources, Besides the Public Funds?

Yes. Individuals and political committees may spend money to publicly express
their support for or against candidates, provided there is no coordination
with the candidate's campaign. Additionally, the law allows party committees
to spend a limited amount on behalf of their Presidential nominees.

How Much Money Has Been Given Out?

For the general election, the law provides a fixed amount indexed to inflation.
In 1976, each major-party nominee received $21.8 million. By 1992, reflecting
inflationary trends, that amount grew to $55.2 million.

In the Presidential primaries, the total amount paid to campaigns varies
from year to year. In 1992, 11 primary candidates received a total of $42.7
million in matching funds. Most candidates ran as Republicans or Democrats;
two third-party candidates also qualified for public funds.

Convention funding is a fixed amount indexed to inflation. In 1992, each
major party received $10.6 million to conduct its Presidential nominating
convention.

How Do Candidates Spend Their Funds?

Candidates spend the checkoff dollars on campaign advertising, campaign
staff, campaign travel, fundraising and other campaign expenses. They may
not use the federal money for personal expenses or for any purpose not related
to the campaign.

Does Anyone Monitor Candidates' Use of Funds?

Yes.
At the end of every Presidential election, the FEC audits the campaigns
that receive public funds. Any unused funds or funds that were not spent
for campaign purposes must be returned to the U.S. Treasury. Since 1976,
approximately $8.7 million has been returned to the Treasury.

Who Administers the Checkoff Program?

The FEC administers and enforces the public funding program. For example,
the agency:

Certifies the eligibility of the candidates and the amount of matching
funds primary candidates receive;

Audits the committees that receive public funds;

Publishes the campaign finance data reported by the candidates and committees;
and

Investigates alleged violations when justified and may initiate civil
court actions to enforce the law.

The IRS monitors the flow of checkoff dollars into the Fund, and the Treasury
Department makes the actual payments to candidates and committees.

Is the Checkoff Used for Administering the
Public Funding Program?

No. All of the checkoff money is used for funding Presidential elections.

Costs of administering the program are covered by the FEC's budget, appropriated
each year by Congress.

What Would Happen If Checkoff Dollars Ran
Short?

If a shortfall occurred in the Presidential Fund, the Secretary of the
Treasury would allocate the remain ing funds among the eligible candidates
and committees. The law requires that priority be given first to party nominating
conventions, then to general election nominees and last to primary election
candidates. If there were insufficient funds for the primary election candidates,
the Treasury would provide only partial matching funds.

Does Checking "Yes" Increase My
Tax?

Checking the "yes" box does not increase the amount of tax you
owe, nor does it decrease any refund to which you are entitled.

The Taxpayer's Choice

In
establishing the checkoff program, Congress left the single most important
decision to you, the taxpayer. You decide whether you want three dollars
of your tax to be used for the Presidential funding program described in
this brochure. The choice is yours to voluntarily check yes or no.

FOOTNOTES:

The Fund is not a separate account but is actually part
of the U.S. Treasury.

In order to qualify for matching funds, a candidate
in the primary elections must first raise over $5,000 in each of 20 states
(i.e., over $100,000), consisting of small contributions ($250 or less)
from individuals.

This publication provides guidance on certain aspects of federal campaign finance law. This publication is not intended to replace the law or to change its meaning, nor does this publication create or confer any rights for or on any person or bind the Federal Election Commission (Commission) or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (2 U.S.C. 431 etseq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions, and applicable court decisions. For further information, please contact: